Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 4 - Accrual Accounting Concepts - Questions: 5

Answer

"The cost principle of accounting requires adjusting entries." This statement is not true.

Work Step by Step

As per the cost principle, the assets are recorded at cost. This is not only at the time of purchase, but also over the time the asset is held. Hence there is no requirement of any adjusting entry.
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